A leading electric vehicle (EV) manufacturer set out to revolutionize the industry with the launch of its mid-priced EV sedan, aiming to deliver high-performance, sustainable transportation to the mass market. However, the ambitious goal of producing hundreds of thousands of units annually led to severe production delays, bottlenecks, and financial strain. The company encountered numerous challenges from supply chain issues and overreliance on automation to an inability to scale manufacturing as planned. These setbacks threatened not only its reputation but also its financial stability, resulting in a period the CEO famously described as "production hell."
Despite the near-crisis situation, the CEO’s relentless leadership, hands-on involvement, and restructuring of production processes helped the company recover. Automation was simplified, efficiency improved, and temporary production lines were set up in unconventional spaces to meet demand. By 2019, the manufacturer had successfully ramped up production, achieved profitability, and solidified its position as a major player in the global EV market. This episode stands as a pivotal lesson in balancing innovation with operational scalability proving that bold vision must be paired with adaptable execution to ensure long-term success.
Why Was the Mid-Priced EV Sedan Such a High-Stakes Gamble?
The launch of the company’s first mass-market EV was a turning point in its strategic plan. Previous models had catered to the luxury segment, but this vehicle was designed to be affordable, technologically advanced, and accessible to a wider audience—with a starting price of USD 35,000. The goal was to bring sustainable transportation to the mainstream.
The CEO envisioned this vehicle as the final phase in a long-term strategy: begin with premium models, then use those profits to develop an affordable, high-volume offering. Consumer enthusiasm was immediate—within the first week of its unveiling in early 2016, the company received over 325,000 reservations, a record-breaking figure in the automotive world. However, this overwhelming demand also placed immense pressure on the company to meet its ambitious production targets.
The company publicly announced its goal to produce 500,000 units annually by 2018—an exponential leap from the 84,000 vehicles it had produced just two years earlier. Achieving such scale in such a short period pushed the company to the brink, setting the stage for an intense and challenging manufacturing crisis.
What Were the Key Challenges in Production?
Despite optimism, the company soon encountered major obstacles that disrupted its plans. By late 2017, it was producing only a few hundred units of its mass-market sedan per week—far below expectations. A major issue was the company’s overreliance on automation. The manufacturing facility had been built with the goal of becoming a highly automated “factory of the future,” but the robotic systems often failed, introducing inefficiencies instead of eliminating them.
Supply chain disruptions further compounded the problem. Key components such as battery modules, seats, and wiring harnesses frequently arrived late or incomplete, stalling the assembly process. Unlike legacy automakers with decades of supply chain management expertise, the EV manufacturer was still developing its capabilities in this area and struggled to coordinate with suppliers effectively.
Moreover, the company lacked experience in large-scale automotive production. Established automakers had perfected high-volume processes over decades. This company, by contrast, was learning in real time—relying on its culture of innovation but lacking the operational muscle needed for mass manufacturing. Production targets were repeatedly missed, investors grew nervous, and public confidence wavered. At one point, the CEO revealed the company was “bleeding money” and just weeks away from bankruptcy.
How Did Leadership Turn Things Around?
Under immense pressure, the CEO took bold and unconventional steps. Acknowledging the pitfalls of excessive automation, leadership scaled back robotic systems and reintroduced human labor at critical points in the production line. This shift improved flexibility, allowed for quicker problem-solving, and accelerated output.
One of the most unorthodox yet effective decisions was to erect a temporary assembly line inside a large tent outside the main factory. This structure, initially mocked, became instrumental in increasing manufacturing capacity without the long delays associated with facility expansion.
The CEO also became intensely involved—working extreme hours, sleeping at the factory, and personally inspecting vehicles to maintain quality standards. These actions boosted employee morale and set a tone of accountability across the organization.
Financially, the company secured emergency funding and restructured supplier agreements to improve cash flow. The CEO’s ability to maintain investor confidence and reassure stakeholders was crucial in giving the company the breathing room needed to recover.
How Was the Crisis Resolved?
By mid-2018, the company reached a milestone: producing 5,000 units of the mass-market EV per week. The production lines had been streamlined, supply chain issues addressed, and a better balance struck between automation and manual labor.
This achievement marked the company’s emergence as a true volume manufacturer, defying critics who doubted it could compete with legacy automakers on scale. The success of the mid-priced EV proved the company’s viability in mainstream markets and set the foundation for future growth.
By 2020, the vehicle became the best-selling electric car worldwide. The manufacturer expanded production further by launching new facilities in multiple countries, enabling greater global reach. The painful lessons from “production hell” ultimately forged a more resilient and capable organization.
What Are the Key Takeaways?
Ambition Must Be Matched by Execution
Aggressive targets are motivating, but without proper planning, they can backfire. The manufacturer’s goal to scale production sixfold within two years was bold—but initial struggles revealed gaps in operational readiness. Growth plans must be grounded in scalable systems, experienced leadership, and a robust infrastructure.
Over-Automation Can Backfire
While automation offers efficiency, too much too soon can disrupt workflows. The company learned the hard way that human flexibility and judgment remain essential. A hybrid model, combining automation with skilled labor, proved more effective than full reliance on robotics.
Leadership During Crisis Is Crucial
The CEO’s direct involvement was pivotal. By personally engaging with the workforce and troubleshooting in real time, leadership inspired the company to push through adversity. Effective crisis management demands visibility, decisiveness, and resilience.
Scaling Requires Operational Maturity
Product innovation is one thing mass production is another. The transition from startup to volume manufacturer involves mastering logistics, quality control, and supplier coordination. This case illustrates the steep learning curve that comes with scaling hardware businesses.
Fast Fact
In 2017, the company was producing only a few hundred units of its mass-market EV per week. By 2023, it had produced over 1.2 million units globally—making it one of the most successful electric vehicles in history.
Author's Detail:
Sumedha Gosavi /
LinkedIn
Sumedha Gosavi is a Research Analyst with a specialized focus on the automobile and transportation sectors. With over two years of experience, she excels in conducting in-depth secondary research, competitive analysis, and market forecasting to deliver actionable insights that drive strategic decision-making.
In her current role, Sumedha leads research initiatives in the dynamic fields of automotive and transportation, identifying key trends, technological advancements, and market opportunities. Her ability to craft tailored research methodologies and distill complex data into clear, impactful strategies has been instrumental in enhancing her organization’s competitive edge.
With a deep passion for innovation in mobility and a commitment to continuous learning, Sumedha remains at the forefront of industry developments. Her expertise and analytical acumen make her an invaluable asset in navigating the ever evolving landscape of automobile and transportation research.
